LONDON Though there has been little movement among the top ten semiconductor suppliers during the first half of 2007 compared to 2006 rankings, market research group IC Insights says there has been some significant changes in the ranking amongst the next ten.
IC Insights suggests a lot of this can be ascribed to the recent collapse in DRAM prices.
However the biggest change has been the position of Freescale Semiconductor (1H07 sales $2.6 billion) which, feeling the pain of its biggest customer, Motorola, dropped from being ranked the 9th largest semiconductor supplier in the world in 2006 to 16th in 1H07. Unfortunately for Freescale, IC Insights notes, Motorola has gone from holding a 23 percent share of mobile phone unit shipments in 2Q06 (51.9 million) to a 14 percent share in 2Q07 (35.5 million).
The biggest riser in the second half compared to 2006 total was Qualcomm ($2.62 billion), gaining four positions to 13th in 1H07. The company was only $17 million behind 12th-ranked Infineon ($2.64 billion).
IC Insight estimates Qualcomm is on track to register a full-year 2007/2006 semiconductor sales increase of 25 percent, but warns there is an important question mark for the company going into the second half of 2007 due to its legal issues with Broadcom, which does not feature in IC Insights' top 20.
NXP Semiconductor ($3 billion) has seen "steady if unspectacular performance" that has seem it move into the top 10 ranking in 1H07 after being ranked 11th in 2006, while STMicroelectronics ($4.7 billion) dipped one spot to fourth, with Toshiba ($5.7 billion) climbing up one spot. The other major European player, Qimonda ($2.3 billion), fell three positions in the rankings, hurt by the DRAM wars.
Not surprisingly, Intel ($15.9 billion), Samsung ($9.2 billion) and TI ($6.3 billion) retained the top three positions over the period. The biggest foundry in the list is TSMC ($4.2 billion), placed 7th in 1H07, down one spot from the position it held for total 2006. This despite the fact that the Taiwanese group recorded the best 2Q07/1Q07 sales increase (17 percent) of the top 20 suppliers and raised its capacity utilization rate to over 94 percent in 2Q07 (up from 83 percent in 1Q07).
Spurred by increasing internal transfers for its PS3 game machines, Sony ($3.3 billion) moved up one spot in the top 10 ranking and currently resides in 9th place.
Although dropping two positions in the ranking to 15th, AMD ($2.6 billion) saw sales in Q207 increase 12 percent over 1Q07. As part of its continuing MPU market share battle with Intel, AMD is expected to announce a major manufacturing/foundry deal in the second half of 2007, says the market research group.
The DRAM price collapse and competitive flash memory market in 1H07 are evident in the extremely poor second quarter results of many of the major memory suppliers. Toshiba, Hynix ($4.6 billion), Qimonda, and Elpida ($2.1 billion) were especially hard hit, each registering a 2Q07/1Q07 sales drop of greater than 20 percent.
IC Insights notes that all of these companies are expecting a rebound in their sales in the second half of the year, with Toshiba planning on a 20 percent increase in its sales in 3Q07.
Despite the 2Q07 DRAM pricing weakness, Hynix moved from 7th to 6th place in the ranking while another big DRAM supplier, Elpida, gained four positions in the ranking, rising from 23rd in 2006 to 19th in 1H07.
Looking to the near term, IC Insights expects to see pricing stability return to the DRAM and flash memory markets in the second half of 2007, surging IC demand for high-end cellular phones, and a noticeable seasonal rebound in overall IC demand beginning in September.
Together, these three factors, in addition to the very tight grouping of the six companies ranked from 12-16 (where there was only a $38 million difference in sales between all five in 1H07), are likely to cause significant changes in the top 20 semiconductor ranking in the second half of 2007, the company forecasts.